Goodwill and fair values

In this lesson

1. 0:00 Goodwill: Definition and Recognition
2. 0:50 Accounting for Goodwill Under IFRS 3
3. 2:11 Negative Goodwill and Bargain Purchases
4. 2:35 Goodwill Impairment Calculation Example
5. 5:39 Fair Value: Concept and Application
6. 6:44 Types of Consideration in Acquisitions
7. 7:42 Deferred and Contingent Consideration
8. 9:07 Fair Value of Consideration Worked Example
9. 12:03 Noncontrolling Interest Valuation Methods
10. 13:31 Fair Value Adjustments to Net Assets
11. 15:03 Intangibles and Contingent Liabilities on Consolidation
12. 16:10 Fair Value Adjustments: Inventory and PPE

About this lesson

You'll discover why positive goodwill is tested annually for impairment rather than amortised, how to split impairment between group and noncontrolling interest using the fair value method, and why negative goodwill represents a bargain purchase. The lesson then covers fair value measurement of acquisition consideration—including cash, deferred payments, contingent consideration, and share exchanges—and shows you how to adjust subsidiary net assets to fair value on consolidation, with practical examples of property, plant and equipment, intangibles, and contingent liabilities. This is essential content for Financial Reporting (FR) and Strategic Business Reporting (SBR), where consolidation questions frequently test your ability to calculate goodwill correctly and apply fair value adjustments. You'll work through a multi-part acquisition scenario involving deferred and contingent consideration, then see how fair value adjustments flow through your net asset working and impact subsequent depreciation. Understanding this material means you'll handle complex group accounting questions with confidence and avoid common errors in goodwill calculations and impairment allocation.

Duration: 17m